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7. Treatment of Partly Paid Shares

7. Treatment of Partly Paid Shares. Whenever shares are partly paid or calls are received in parts, than : Wt. Average will be calculated based on share capital (In Rs terms) Basic EPS will be calculated Per Rs.

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7. Treatment of Partly Paid Shares

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  1. 7. Treatment of Partly Paid Shares Whenever shares are partly paid or calls are received in parts, than : • Wt. Average will be calculated based on share capital (In Rs terms) • Basic EPS will be calculated Per Rs. • BEPS for each share will be calculated by multiplying BEPS Per Rs with Par Value. Note:Partly paid shares will be considered for BEPS, if they are entitled to dividend else effect is taken in calculating DEPS.

  2. 8. Treatment of Right Shares (Cheap Shares) Whenever shares are issued at a price less than appropriate price, it is considered as Right Price. Following steps are applied : • Calculate Fair Value Ex Right : Total No. of Share No of Shares Fair Value Right Right = Before Right * Cum Right + Shares * Price Total No. of Shares After Right

  3. ii) Calculate Paid Part in Share : Right Shares * Right Price Fair Value Ex Right iii) Calculate Free Part in Right : = Right Share - Paid Part Note: • Date is Relevant for Paid Part since resources have been received. • Date is not Relevant for Free Part since resources have not been received. • Restatement is required for Bonus / Free Part.

  4. 9. Differential Dividend RightSec 86 of the Indian Companies Act Any Company can have Share Capital with different voting/ Dividend Right. AS 20 requires EPS to be disclosed for each class of Equity Share having different dividend rights. As per Sec 86, different dividend right can be : • Absolute ( Incremental) • Proportionate ( Multiple) Absolute Means = Normal Dividend + Special Right Proportionate Means = Normal Dividend * Special Right

  5. Calculation of BEPS – Absolute Dividend Right • Calculate special dividend for each Class. 2. Calculate Normal Earnings : Earning for ESH -------- Less: Special Dividend -------- Normal Earning ****** • Calculate EPS normal. • Calculate BEPS for each Class: Normal BEPS + Special Dividend for each class No. of Share in that Class

  6. Calculation of BEPS – Proportionate Right • Calculate ratio of attributable dividend to each class : Dividend = No. of Share * Paid up * Dividend in class Value Right 2. Allocate Earning per Equity Share Holder in Ratio of Dividend. 3. Calculate BEPS for each class. Allocated Earnings No. of Shares

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